Case Law Details
Niranjan Lal Jindal Vs ITO (ITAT Kolkata)
The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) partly allowed the appeal filed by the assessee for AY 2017-18 and reduced the estimated profit rate on undisclosed turnover from 8% to 2.5%.
The assessee was engaged in the business of jute bags. During the proceedings, it was submitted that the assessee had disclosed turnover of Rs.6,21,06,328 under the name “Jindal Supply Company.” However, the assessee was also carrying on another business under the name “Goel Agro Business,” having turnover of Rs.12,69,82,201, which had remained suppressed. The Assessing Officer detected the undisclosed transactions and estimated profit on such turnover at 8%, which was brought to tax. The CIT(A) did not grant any relief to the assessee.
Before the Tribunal, the assessee submitted that in the case of the assessee’s brother, decided by the Coordinate Bench in Sri Mohit Jindal v. ITO for the same assessment year, profit on similar undisclosed turnover had been estimated at 1.25% instead of 8%. The assessee requested that the same rate be applied in the present case.
The Revenue contended that the entire turnover in question was undisclosed and therefore the estimation made by the Assessing Officer should be sustained.
The Tribunal observed that the undisclosed turnover of the assessee was more than double the disclosed turnover. It further observed that generation of undisclosed turnover resulted in savings on expenses such as rent, salary, and other fixed costs, thereby increasing the profit margin from such transactions.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as the `CIT(A)1 in appeal no.CIT(A), Kolkata-14/ 10235/2019-20 dated 11.03.2025 for the assessment year 2017-18.
2. Shri Miraj D. Shah, AR, represented on behalf of the assessee and Shri Sandeep Lakra, Sr. DR represented on behalf of the revenue.
3. It was submitted by the ld. AR that the assessee is engaged in the business of jute bag. It was the submission that the assessee has shown a turnover of Rs.6,21,06,328/- in the name of Jindal Supply Company, this was the disclosed turnover. The assessee was also running another business under the name of Goel Agro Business which has a turnover of Rs. 12,69,82,201/-, this entire turnover was suppressed. The Assessing Officer found this transaction and brought to tax the estimated profit at 8%. It was the submission that the ld. CIT(A) did not grant any relief to the assessee. It was the submission that under similar circumstances in the case of the assessee’s brother, the Coordinate Bench of this Tribunal in the case of Sri Mohit Jindal vs. ITO in ITA No.652/Kol/2022 for the same assessment year had estimated the income of the assessee at 1.25% as against 8%. It was the submission that on identical lines, the income of the assessee may be estimated at 1.25%.
4. In reply, the ld. Sr. DR submitted that the entire turnover of the assessee is undisclosed and the income as estimated by the Assessing Officer is to be upheld.
6. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the undisclosed turnover of the assessee is more than the double against the disclosed turnover. Obviously, when the undisclosed turnover has been generated, the assessee has saved on rent, salary and many other fixed costs. Obviously, this would increase the rate of profit in the case of the assessee. This being so, we are of the view that the assessee had disclosed 0.75% to 1% profit margin from the regular business turnover, the profit rate from the undisclosed turnover should be estimated at nearly at 2.5% of the undisclosed turnover. The Assessing Officer is directed to assess the income of the assessee at 2.5% of the undisclosed turnover as against 8% done by the Assessing Officer.
7. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 06/04/2026.
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